Analyzing Fulgent Genetics (NASDAQ:FLGT) and Schrodinger (NASDAQ:SDGR)

Fulgent Genetics (NASDAQ:FLGT) and Schrodinger (NASDAQ:SDGR) are both small-cap medical companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Profitability

This table compares Fulgent Genetics and Schrodinger’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fulgent Genetics	-16.83%	-2.26%	-2.10%
Schrodinger	-76.22%	-45.70%	-24.81%

Analyst Ratings

This is a breakdown of current ratings and price targets for Fulgent Genetics and Schrodinger, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fulgent Genetics	0	1	2	0	2.67
Schrodinger	0	2	4	0	2.67

Fulgent Genetics currently has a consensus target price of $25.33, indicating a potential upside of 15.78%. Schrodinger has a consensus target price of $27.83, indicating a potential upside of 49.88%. Given Schrodinger’s higher probable upside, analysts plainly believe Schrodinger is more favorable than Fulgent Genetics.

Volatility and Risk

Fulgent Genetics has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, Schrodinger has a beta of 1.79, suggesting that its share price is 79% more volatile than the S&P 500.

Insider & Institutional Ownership

48.1% of Fulgent Genetics shares are owned by institutional investors. Comparatively, 79.1% of Schrodinger shares are owned by institutional investors. 31.8% of Fulgent Genetics shares are owned by insiders. Comparatively, 21.0% of Schrodinger shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Fulgent Genetics and Schrodinger”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fulgent Genetics	$283.47 million	2.36	-$42.71 million	($1.66)	-13.18
Schrodinger	$237.92 million	5.75	-$187.12 million	($2.48)	-7.49

Fulgent Genetics has higher revenue and earnings than Schrodinger. Fulgent Genetics is trading at a lower price-to-earnings ratio than Schrodinger, indicating that it is currently the more affordable of the two stocks.

Summary

Fulgent Genetics beats Schrodinger on 7 of the 13 factors compared between the two stocks.

About Fulgent Genetics

Fulgent Genetics, Inc., together with its subsidiaries, provides clinical diagnostic and therapeutic development solutions to physicians and patients in the United States and internationally. The company’s clinical diagnostic solutions include molecular diagnostic testing; genetic testing; anatomic pathology laboratory tests and testing services, such as gastrointestinal pathology, dermatopathology, urologic pathology, breast pathology, neuropathology, and hematopathology; oncology tests and testing services; and sequencer services related to hereditary cancer, reproductive health, and other diseases. Its therapeutic development solutions focus on developing drug candidates for treating a range of cancers using a nanoencapsulation and targeted therapy platform to enhance the therapeutic window and pharmacokinetic profile of new and existing cancer drugs. The company operates picture genetics platform, which includes gene probes, data suppression and comparison algorithms, adaptive learning software, and proprietary laboratory information management systems that helps customers to identify health markers in their personal DNA. It serves insurance, hospitals, medical institutions, other laboratories, governmental bodies, payors, municipalities and large corporations, and patients. The company was formerly known as Fulgent Diagnostics, Inc. and changed its name to Fulgent Genetics, Inc. in August 2016. Fulgent Genetics, Inc. was founded in 2011 and is headquartered in El Monte, California.

About Schrodinger

Schrödinger, Inc., together with its subsidiaries, develops physics-based computational platform that enables discovery of novel molecules for drug development and materials applications. The company operates in two segments, Software and Drug Discovery. The Software segment is focused on licensing its software to transform molecular discovery for life sciences and materials science industries. The Drug Discovery segment focuses on building a portfolio of preclinical and clinical programs, internally and through collaborations. The company serves biopharmaceutical and industrial companies, academic institutions, and government laboratories worldwide. Schrödinger, Inc. was incorporated in 1990 and is based in New York, New York.